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Critical Access Hospitals Crisis in GA a National Bellwether

 |  By John Commins  
   February 19, 2014

An advocate for rural health says the rural hospital community in Georgia, rife with closings, is so financially strapped that "about 10% of our population [can be considered] Third World Nation health status." More hospital closings are "inevitable" and the trend could spread to the rest of the country, he says.

 

Jimmy Lewis, CEO of HomeTown Health, LLC

Lower Oconee Community Hospital, a 25-bed critical access hospital in Glenwood, GA in the southeastern corner of the state, announced this month that it will close because of financial pressures. The grim news for the nearly 7,900 people of Wheeler County marks the fourth closure of a rural hospital in Georgia in the past two years.

Attempts to contact the hospital proved fruitless. The plug has been pulled on hospital's website and nobody answered my telephone calls. CEO Karen O'Neal told WMAZ television that the 100 or so employees at the hospital had been laid off, and that "this restructuring is being done to provide sustainable medical services in the Glenwood area." She also told the television station that the hospital's owners are contemplating "some kind of urgent care center.''

Jimmy Lewis, CEO of HomeTown Health, LLC, an advocacy association for 56 small hospitals in Georgia, believes that closures of rural hospitals in his state could serve as a bellwether for the rest of the nation. Lewis spoke with HealthLeaders Media earlier this month, and the following is an edited transcript.

HLM: Georgia has seen four rural hospitals close in the past two years. What is driving this?

Lewis: Because of the incremental reduction in Medicaid over 10 years or so in Georgia and other issues, many of these critical access hospitals have about a seven-year death spiral that's a function of the cost-to-charge ratio. The rural hospital community in Georgia is financially strapped.

For the most part, they have financial losses due to operations, and if they are surviving, it's almost entirely on subsidies such as the disproportionate share payment and more especially payments from local and county governments. Reimbursements are down and they are continuing to fall. We are looking at losing disproportionate share payments. We are at a point where we have insufficient reimbursements.

Then along comes the economic downturn. Unemployment goes up; self-paid uninsured soars. We have uninsured in Georgia at about 17%. We have unemployment in some of these rural communities at 15%-18% plus the underemployed. The consequence is that we have a population of hospitals in rural Georgia that are in great jeopardy.

HLM: Do you anticipate more rural hospital closings in Georgia?

Lewis: We have a situation in Georgia where more closings are inevitable.

HLM: Is the rural hospital crisis in Georgia a bellwether for the rest of the nation?

Lewis: That would be correct. Georgia may be at the front end of the pack because of these incremental reductions in Medicaid and because we have so many critical access hospitals. As these rural hospitals close, it dominoes up to the next-larger hospital and the next-larger hospital and as that occurs, it is going to be a big problem. We just move the self-paid and the uninsured up to the next level of hospitals, and we've got a lot of large hospitals whose ERs are bursting already and this is going to compound that problem.

HLM: What will be the effect on rural healthcare access with these closings?

Lewis: I represent 56 hospitals and when I look at the population in those counties, that is about 1 million people. Georgia is a 10-million-person state, so we have about 10% of our population that we can move into Third World Nation health status. They will have to drive 30 to 60 miles to get healthcare.

We have a large part of Georgia from Macon to Augusta where there are basically no OB deliveries. We've got 32-of-33 critical access hospitals that no longer deliver babies. We've got 12 to 14 of the next larger hospitals that no longer delivery babies. We have about 45–47 hospitals in Georgia that no longer deliver babies. We are seeing a significant reduction in services and access and that creates a situation of higher acuity patients when they do show and it's going to cost the governments supporting it a lot more money.

HLM: Has Georgia's decision to forego Medicaid expansion money been a factor in these closings?

Lewis: Our hospitals have been in trouble as a result of what has happened since 1999. That is what got us into the trouble. The issue of Medicaid expansion is how much money and how quickly would it come in and help those hospitals. Unfortunately, we may be in a situation where we are going to lose hospitals because of the last 10 years. That Medicaid expansion money, although it would be helpful, may not [have been there] in time.

HLM: Oconee had about 100 employees. What happens when those jobs leave the region?

Lewis: They clearly are the best jobs in the community and because most of those are higher paying healthcare jobs, they have to go if they can to the next-closest facility to try to get jobs there. And that is usually a 30-plus mile trip to get employment. People on the lesser-skilled side of that situation just go into unemployment. In Glenwood, I think the unemployment was over 15%. They just go into the unemployment rolls.

HLM: Where will people in Wheeler County go now for their care?

Lewis: They will have to go 20 to 30 miles in any direction to find a hospital. For physicians, when the hospital is gone, the physicians go and it creates a problem. Those people in those communities are going to struggle to find access. In many cases what ends up happening is if the emergency medical services stay, they end up using the ambulance to carry low-acuity patients to healthcare when they don't have any other means of access.

HLM: Can Oconee and other rural hospitals restructure for different services, such as stand-alone emergency departments or urgent care centers?

Lewis: In Georgia there is some work being done legislatively to find a licensure vehicle that would allow restructuring to occur, but right now we do not have regulatory or licensing vehicles to allow for standalone emergency departments or anything like that.

HLM: What happens to the communities when these hospitals shutter?

Lewis: If there is not a hospital, there won't be any future economic development. If a hospital closes and the community has an industry, they have a strong possibility of losing that industry simply because the industry cannot assume the liability for accidents and healthcare for its employees if it can't find access to care.

These hospitals are economic engines and when they close, the community goes into an economic paralysis. Nothing ever goes back there again from an industry standpoint or a jobs growth standpoint.

HLM: Why are rural hospitals struggling even more than their urban and suburban counterparts?

Lewis: Rural hospitals do not have the population to support specialty services. Larger hospitals have in some cases very large sums of money entirely as a result of specialty services they provide including cardiology and orthopedics and oncology. In small rural hospitals it is a rarity to see a surgeon. It takes eight family practitioners to support one surgeon. It takes about 5,000 people to support a family practitioner. So you have to have 40,000 to support a surgeon. Well, that is just not there.

HLM: What needs to be done to keep rural hospitals viable?

Lewis: Somewhere along the line, a decision will be made that we will either try to address rural America or we will just let it go to Hell. Right now it is in the process of going to Hell because the payers don't have any sensitivity to save the rural segment.

It is easier for them to cut rates to rural hospitals because they have less ability to negotiate because they don't have the volumes. Until such time as policy makers mandate that insurance companies reconsider the rural part of the nation we are going to have a situation in Georgia and nationally where the people who live in rural communities are going to be very old and on Medicare, or they are going to be unemployed and uninsured or on Medicaid and it is going to be a tremendous financial burden on all the states.

HLM: Is there any good news out there for rural providers?

Lewis: If you look at what is coming out of Washington, there was a recent proposal to do away with critical access hospital designation. That is the vehicle that has kept those hospitals going and somebody wants to eliminate that! The only good news is those people in rural healthcare have the passion to help people and help them survive. The American spirit does live on.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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